Hingham Savings Reports18% Growth in Quarterly Earnings

July 17, 2014 08:05 AM Eastern Daylight Time

HINGHAM, Mass.--(BUSINESS WIRE)--HINGHAM INSTITUTION FOR SAVINGS (NASDAQ – HIFS), announced second
quarter earnings for 2014. Net income for the quarter ended June 30,
2014 was $3,873,000 or $1.82 per share (basic and diluted) as compared
to $3,275,000 or $1.54 per share (basic and diluted) in earnings for the
second quarter of 2013. The Bank’s annualized return on average equity
for the second quarter of 2014 was 13.51%, and the annualized return on
average assets was 1.08%.

Net income for the six months ended June 30, 2014 was $13,248,000 or
$6.22 per share (basic and diluted) as compared to $6,480,000 or $3.05
per share basic and $3.04 per share diluted for the same period last
year. Earnings for first six months of 2014 included a one-time net gain
of approximately $5.7 million related to non-taxable life insurance
death benefit income of $6,302,000 less an accrual of $949,000 for a
contractual death benefit liability, and $388,000 in related income tax
benefit. Excluding this event, the Bank earned $7,507,000 or $3.53 per
share basic and $3.52 per share diluted for the first six months of
2014, representing a 16% increase in net income over same period last
year.

The Bank’s return on average equity for the first six months of 2014 was
23.86%, and the return on average assets was 1.88%. Excluding the $5.7
million event, the Bank’s return on average equity for the first six
months of 2014 was 13.52%, and the return on average assets was 1.06% as
compared to return on average equity of 13.44% and a return on average
assets of 1.07% for the first six months of 2013.

Strong growth trends of recent years continued, as deposits increased by
$83.8 million from December 31, 2013 and $132.9 million from June 30,
2013, representing an 18% annualized growth year to date and 15% from
June 30, 2013. Net loans increased by $109.3 million from December 31,
2013 and $197.3 million from June 30, 2013, representing 20% annualized
growth year to date and 20% growth from June 30, 2013. Total assets
increased by $124.5 million from December 31, 2013 and $225.3 million
from June 30, 2013, representing an 18% annualized growth year to date
and 18% from June 30, 2013. Stockholders’ equity increased to $115.6
million as of June 30, 2014, representing a 24% annualized growth year
to date and an 18% increase from June 30, 2013. Book value per share
increased to $54.32 per share at June 30, 2014 from $48.49 per share at
December 31, 2013 and $46.08 per share at June 30, 2013.

At June 30, 2014, non-performing assets totaled 0.44% of total assets,
compared with 0.46% at December 31, 2013 and 0.38% at June 30, 2013. For
the quarter ended June 30, 2014, a provision of $175,000 was made to the
allowance for loan losses compared to $100,000 for the same period in
2013.

President Robert H. Gaughen, Jr. stated, “We are pleased to report that
our current quarterly earnings represent an 18% increase over the second
quarter of 2013. Improvement in our net interest margin, combined with
effective cost control and solid growth in our balance sheet continue to
produce some of the strongest earnings in the industry. This is a
reflection of our continued commitment to shareholder value through
quality growth and effective cost control.”

Hingham Institution for Savings is a Massachusetts-chartered savings
bank located in Hingham, Massachusetts. Incorporated in 1834, it is the
oldest financial institution headquartered in Hingham and one of the
oldest in the Commonwealth. The Bank’s main offices are located on Main
Street, Hingham, Massachusetts 02043, phone (781) 749-2200. The Bank
also maintains branch offices in South Hingham and the neighboring towns
of Cohasset, Hull, Norwell, Scituate and Weymouth, as well as branches
in the South End of Boston, on Beacon Hill and on the island of
Nantucket.

The Bank’s shares of common stock are listed and traded on The NASDAQ
Stock Market under the symbol HIFS.

HINGHAM INSTITUTION FOR SAVINGS

Consolidated Balance Sheets

(Dollars in thousands except per share data)

June 30,2014

December 31,2013

June 30,2013

(Unaudited)

ASSETS

Cash and due from banks

$

8,140

$

11,922

$

8,570

Short-term investments

120,647

90,925

87,195

Cash and cash equivalents

128,787

102,847

95,765

Certificates of deposit

14,209

13,011

13,055

Securities available for sale, at fair value

97,331

106,369

103,580

Federal Home Loan Bank stock, at cost

16,983

15,978

14,043

Loans, net of allowance for loan losses of $8,834

at June 30, 2014, $8,509 at December 31, 2013

and $8,330 at June 30, 2013

1,188,157

1,078,879

990,831

Foreclosed assets

425

271

471

Bank-owned life insurance

11,272

15,375

15,160

Premises and equipment, net

15,537

15,854

15,101

Accrued interest receivable

3,112

2,792

3,119

Deferred income tax asset, net

2,981

2,934

2,676

Other assets

2,166

2,131

1,848

Total assets

$

1,480,960

$

1,356,441

$

1,255,649

LIABILITIES AND STOCKHOLDERS’ EQUITY

Deposits

$

1,024,673

$

940,906

$

891,772

Federal Home Loan Bank advances

331,668

302,732

257,795

Mortgage payable

997

1,020

1,043

Mortgagors’ escrow accounts

3,956

3,709

3,092

Accrued interest payable

379

490

448

Other liabilities

3,645

4,367

3,473

Total liabilities

1,365,318

1,253,224

1,157,623

Stockholders’ equity:

Preferred stock, $1.00 par value,

2,500,000 shares authorized, none issued

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Common stock, $1.00 par value, 5,000,000 shares authorized;2,128,750
shares issued and outstanding at June 30,2014 and December
31, 2013 and 2,127,250 sharesissued and outstanding at June
30, 2013